Thank you for sharing!

Your article was successfully shared with the contacts you provided.

CHICAGO-First Industrial Realty Trust Inc. has bought an 800-acre portfolio of seven vehicle auction sites from Adesa Inc., a subsidiary of KAR Holdings Inc., for $74 million. In the coming weeks, The REIT will close on the purchase of one more site from Adesa for an addition $7.5 million. First Industrial will lease the space back to Adesa for approximately $6.4 million a year with initial lease terms of 20 years, says Eric Loughmiller, EVP and CFO for KAR.

“The sale fits into paying down our debt and creating liquidity for acquisitions and capital expenditures,” Loughmiller tells GlobeSt.com. At least half of the net proceeds of the sale will be used to repay debt in accordance with the terms of the company’s senior credit agreement, Loughmiller says. He says the other half will be available for reinvestment, possibly in new acquisitions.

Four of the eight properties are located in California, in Tracy, Otay Mesa, Mira Loma and Sacramento. The portfolio also includes land in Houston; Auburn, WA near Seattle-Tacoma; and Bradenton, FL outside of Tampa. The final property, to be closed on by the end of the month, is in Fairburn, GA, outside of Atlanta. Under the lease, Adesa has the renewal option to extend its lease term on the spaces by another 20 years.

“The land is in strategic markets that serve the major population centers, and that’s what attracted us to them,” says Kevin Czerwinski, an SVP who led First Industrial’s team in the purchase.

The sites are mostly open land, with a few buildings on the properties that Adesa uses for its business. Adesa uses the space to offer full auction services to manufacturers, banks and other financial institutions, vehicle rental companies and fleet management providers. The sites were chosen by Adesa for their proximity to major metropolitan areas. Under the terms of the sale, First Industrial will also put $12.5 million toward improvements at the Otay Mesa, CA site.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.